Industry Comparison

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Current language: English (2023)

You are viewing information about the following Industries:

  • Investment Banking & Brokerage Investment Banking & Brokerage industry entities perform a wide range of functions in the capital markets, including raising and allocating capital and providing market-making and advisory services for corporations, financial institutions, governments and high net-worth individuals. Specific activities include financial advisory and securities underwriting services conducted on a fee basis; securities and commodities brokerage activities, which involve buying and selling securities or commodities contracts and options on a commission or fee basis; and trading and principal investment activities, which involve the buying and selling of equities, fixed income, currencies, commodities and other securities for client-driven and proprietary trading. Investment banks also originate and securitise loans for infrastructure and other projects. Entities in the industry generate revenues from global markets and, therefore, are exposed to various regulatory regimes. The industry continues to face regulatory pressure to reform and disclose aspects of operations that present systemic risks. Specifically, entities are facing new capital requirements, stress testing, limits on proprietary trading and increased scrutiny over compensation practices.
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  • Iron & Steel Producers The Iron & Steel Producers industry primarily consists of entities producing iron and steel in mills and foundries. The steel producers segment produces iron and steel products from its own mills. These products include flat-rolled sheets, tin plates, pipes, tubes, and products made of stainless steel, titanium and high alloy steels. Iron and steel foundries, which cast various products, typically purchase iron and steel from other entities. The industry also includes metal service centres and other metal merchant wholesalers, which distribute, import or export ferrous products. Though entities are developing alternative processes, steel production primarily relies on two primary methods: the basic oxygen furnace (BOF), which uses iron ore as an input, and the electric arc furnace (EAF), which uses scrap steel. Many entities in the industry operate on an international scale. Note: With a few exceptions, most entities do not mine their own ore to manufacture steel and iron products. There exists a separate standard for the Metals & Mining (EM-MM) industry.
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Relevant Issues for both Industries (11 of 26)

Why are some issues greyed out? The SASB Standards vary by industry based on the different sustainability-related risks and opportunities within an industry. The issues in grey were not identified during the standard-setting process as the most likely to be useful to investors, so they are not included in the Standard. Over time, as the ISSB continues to receive market feedback, some issues may be added or removed from the Standard. Each company determines which sustainability-related risks and opportunities are relevant to its business. The Standard is designed for the typical company in an industry, but individual companies may choose to report on different sustainability-related risks and opportunities based on their unique business model.

Disclosure Topics

What is the relationship between General Issue Category and Disclosure Topics? The General Issue Category is an industry-agnostic version of the Disclosure Topics that appear in each SASB Standard. Disclosure topics represent the industry-specific impacts of General Issue Categories. The industry-specific Disclosure Topics ensure each SASB Standard is tailored to the industry, while the General Issue Categories enable comparability across industries. For example, Health & Nutrition is a disclosure topic in the Non-Alcoholic Beverages industry, representing an industry-specific measure of the general issue of Customer Welfare. The issue of Customer Welfare, however, manifests as the Counterfeit Drugs disclosure topic in the Biotechnology & Pharmaceuticals industry.
  • Investment Banking & Brokerage Remove
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    • GHG Emissions The category addresses direct (Scope 1) greenhouse gas (GHG) emissions that a company generates through its operations. This includes GHG emissions from stationary (e.g., factories, power plants) and mobile sources (e.g., trucks, delivery vehicles, planes), whether a result of combustion of fuel or non-combusted direct releases during activities such as natural resource extraction, power generation, land use, or biogenic processes. The category further includes management of regulatory risks, environmental compliance, and reputational risks and opportunities, as they related to direct GHG emissions. The seven GHGs covered under the Kyoto Protocol are included within the category—carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF6), and nitrogen trifluoride (NF3).
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    • Air Quality The category addresses management of air quality impacts resulting from stationary (e.g., factories, power plants) and mobile sources (e.g., trucks, delivery vehicles, planes) as well as industrial emissions. Relevant airborne pollutants include, but are not limited to, oxides of nitrogen (NOx), oxides of sulfur (SOx), volatile organic compounds (VOCs), heavy metals, particulate matter, and chlorofluorocarbons. The category does not include GHG emissions, which are addressed in a separate category.
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    • Energy Management The category addresses environmental impacts associated with energy consumption. It addresses the company’s management of energy in manufacturing and/or for provision of products and services derived from utility providers (grid energy) not owned or controlled by the company. More specifically, it includes management of energy efficiency and intensity, energy mix, as well as grid reliance. Upstream (e.g., suppliers) and downstream (e.g., product use) energy use is not included in the scope.
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    • Water & Wastewater Management The category addresses a company’s water use, water consumption, wastewater generation, and other impacts of operations on water resources, which may be influenced by regional differences in the availability and quality of and competition for water resources. More specifically, it addresses management strategies including, but not limited to, water efficiency, intensity, and recycling. Lastly, the category also addresses management of wastewater treatment and discharge, including groundwater and aquifer pollution.
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    • Waste & Hazardous Materials Management The category addresses environmental issues associated with hazardous and non-hazardous waste generated by companies. It addresses a company’s management of solid wastes in manufacturing, agriculture, and other industrial processes. It covers treatment, handling, storage, disposal, and regulatory compliance. The category does not cover emissions to air or wastewater nor does it cover waste from end-of-life of products, which are addressed in separate categories.
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    • Employee Health & Safety The category addresses a company’s ability to create and maintain a safe and healthy workplace environment that is free of injuries, fatalities, and illness (both chronic and acute). It is traditionally accomplished through implementing safety management plans, developing training requirements for employees and contractors, and conducting regular audits of their own practices as well as those of their subcontractors. The category further captures how companies ensure physical and mental health of workforce through technology, training, corporate culture, regulatory compliance, monitoring and testing, and personal protective equipment.
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    • Employee Engagement, Diversity & Inclusion The category addresses a company’s ability to ensure that its culture and hiring and promotion practices embrace the building of a diverse and inclusive workforce that reflects the makeup of local talent pools and its customer base. It addresses the issues of discriminatory practices on the bases of race, gender, ethnicity, religion, sexual orientation, and other factors.
      • Employee Diversity & Inclusion Entities in the Investment Banking & Brokerage industry face significant competition for skilled employees. As the industry continues to undergo rapid innovation through the introduction of more complex financial products and computerised algorithmic and high-frequency trading, material concerns such as profitability are more likely to determine the ability of entities to attract and retain skilled employees. By ensuring gender and racial diversity throughout the organisation, entities may expand their candidate pool, which may reduce hiring costs and improve operational efficiency. Evidence also suggests that entities with more diverse groups of employees may reduce risk-taking among employees involved in risk-prone trading activities (for example, trading), which may reduce the entity’s overall risk exposure. Entities with more diverse workforces may, therefore, be better able to attract skilled labour, adapt to advancements in technology and safeguard employee well-being.
    • Product Design & Lifecycle Management The category addresses incorporation of environmental, social, and governance (ESG) considerations in characteristics of products and services provided or sold by the company. It includes, but is not limited to, managing the lifecycle impacts of products and services, such as those related to packaging, distribution, use-phase resource intensity, and other environmental and social externalities that may occur during their use-phase or at the end of life. The category captures a company’s ability to address customer and societal demand for more sustainable products and services as well as to meet evolving environmental and social regulation. It does not address direct environmental or social impacts of the company’s operations nor does it address health and safety risks to consumers from product use, which are covered in other categories.
      • Incorporation of Environmental, Social, and Governance Factors in Investment Banking & Brokerage Activities Environmental, social and governance (ESG) factors may have material impacts on the entities assets and projects across a range of industries to which investment banks provide services or in which they invest. Therefore, by accounting for these factors in underwriting, advisory, investing and lending activities, investment banks may manage significant positive and negative environmental and social externalities effectively. The potential for both value creation and loss associated with ESG factors suggests that investment banking and brokerage entities have a responsibility to shareholders and clients to consider these factors when analysing and valuing core products, including sell-side research, advisory services, origination, underwriting and principal transactions. Investment banking and brokerage entities that fail to manage these risks and opportunities effectively may expose themselves to increased reputational and financial risks. Appropriately pricing ESG risks may reduce investment banks’ financial risk exposure, help generate additional revenue or open new market opportunities. To help investors better understand how entities in the industry manage these issues, investment banks should disclose how they incorporate ESG factors in their core products and services.
    • Supply Chain Management The category addresses management of environmental, social, and governance (ESG) risks within a company’s supply chain. It addresses issues associated with environmental and social externalities created by suppliers through their operational activities. Such issues include, but are not limited to, environmental responsibility, human rights, labour practices, and ethics and corruption. Management may involve screening, selection, monitoring, and engagement with suppliers on their environmental and social impacts. The category does not address the impacts of external factors – such as climate change and other environmental and social factors – on suppliers’ operations and/or on the availability and pricing of key resources, which is covered in a separate category.
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    • Business Ethics The category addresses the company’s approach to managing risks and opportunities surrounding ethical conduct of business, including fraud, corruption, bribery and facilitation payments, fiduciary responsibilities, and other behaviour that may have an ethical component. This includes sensitivity to business norms and standards as they shift over time, jurisdiction, and culture. It addresses the company’s ability to provide services that satisfy the highest professional and ethical standards of the industry, which means to avoid conflicts of interest, misrepresentation, bias, and negligence through training employees adequately and implementing policies and procedures to ensure employees provide services free from bias and error.
      • Business Ethics The regulatory environment surrounding the Investment Banking & Brokerage industry continues to evolve internationally. Entities must adhere to a complex and often inconsistent set of rules relating to performance and conduct, as well as provide disclosure on issues including insider trading, antitrust behaviour, price fixing and market manipulation. Entities are subject to strict legal requirements against tax evasion, fraud, money laundering and corrupt practices. In some jurisdictions, enhanced rewards for whistle-blowers may increase the number of complaints brought to regulators. Entities that ensure regulatory compliance through robust internal controls may build trust with clients, increase revenue and protect shareholder value by minimising losses incurred because of legal proceedings.
      • Professional Integrity The success of entities in the Investment Banking & Brokerage industry is dependent on cultivating client trust and loyalty. To ensure long-term, mutually beneficial relationships, entities must provide services that satisfy the highest professional standards, which means taking careful measures to avoid conflicts of interest, misrepresentation and negligence. Professional integrity also means following a code of ethics with respect to transparency and disclosure. These measures are important both for preserving an entity’s licence to operate, as well as for attracting and retaining clients. Failure to meet professional standards may lead to negative consequences such as legal penalties or reputational damage, harming the entity’s clients as well as its shareholders. To maintain professional integrity, entities must ensure employees are trained in, and committed to adhering to, applicable financial industry regulations. A description of management’s approach to assuring professional integrity may help investors understand risk exposure and processes in place to avoid misconduct. Disclosure of the entity’s amount of legal and regulatory fines and settlements may provide investors and stakeholders with more transparent information regarding which financial institutions are adhering to regulatory norms.
    • Systemic Risk Management The category addresses the company’s contributions to or management of systemic risks resulting from large-scale weakening or collapse of systems upon which the economy and society depend. This includes financial systems, natural resource systems, and technological systems. It addresses the mechanisms a company has in place to reduce its contributions to systemic risks and to improve safeguards that may mitigate the impacts of systemic failure. For financial institutions, the category also captures the company’s ability to absorb shocks arising from financial and economic stress and meet stricter regulatory requirements related to the complexity and interconnectedness of companies in the industry.
      • Systemic Risk Management Investment Banking & Brokerage entities that fail to manage risks to capital effectively may suffer significant value losses to their financial assets while increasing liabilities. Because of the interconnectedness of the global financial system, these failures can contribute to significant market disruption and financial crises. This systemic nature of risk has become a central concern for regulators. As a result, many jurisdictions require that banks undergo supervised stress tests to evaluate whether the entity has sufficient capital and liquidity to absorb losses, continue operations and meet obligations in adverse economic and financial conditions. Failure to meet regulatory requirements may lead to penalties and substantially increased future compliance costs. Investment banks should improve their disclosures by measuring how well they can absorb shocks arising from systemic stresses to demonstrate how risks associated with their size, complexity, interconnectedness, substitutability and cross-jurisdictional activity are being managed. Entities that commit to enhanced disclosures may experience improved investor and shareholder confidence, potentially leading to increased revenues.
      • Employee Incentives & Risk-taking Variations in employee compensation structures in the Investment Banking & Brokerage industry may incentivise employees to focus on short- or long-term entity performance. Structures that emphasise short-term performance may encourage excessive risk-taking, with adverse implications for long-term corporate value. Various financial crises in recent decades have increased regulatory and shareholder scrutiny towards excessive risk-taking behaviour. Enhanced disclosure of employee compensation, focusing on performance metrics and variable remuneration, policies regarding clawback provisions, supervision, control and validation of traders’ pricing of Level 3 assets may provide investors with a better understanding of how entities are preserving corporate value by prioritising long-term growth over short-term reward.
  • Iron & Steel Producers Remove
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    • GHG Emissions The category addresses direct (Scope 1) greenhouse gas (GHG) emissions that a company generates through its operations. This includes GHG emissions from stationary (e.g., factories, power plants) and mobile sources (e.g., trucks, delivery vehicles, planes), whether a result of combustion of fuel or non-combusted direct releases during activities such as natural resource extraction, power generation, land use, or biogenic processes. The category further includes management of regulatory risks, environmental compliance, and reputational risks and opportunities, as they related to direct GHG emissions. The seven GHGs covered under the Kyoto Protocol are included within the category—carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF6), and nitrogen trifluoride (NF3).
      • Greenhouse Gas Emissions Iron and steel production generates significant direct greenhouse gas (GHG) emissions, primarily carbon dioxide and methane, from production processes and on-site fuel combustion. Although technological improvements have reduced the GHG emissions per tonne of steel produced, steel production remains carbon-intensive compared to other industries. Regulatory efforts to reduce GHG emissions in response to the risks posed by climate change may result in additional regulatory compliance costs and risks for iron and steel entities because of climate change mitigation policies. Entities can achieve operational efficiencies through the cost-effective reduction of GHG emissions. Capturing such efficiencies can mitigate the potential financial effects of increased fuel costs from regulations that limit—or put a price on—GHG emissions.
    • Air Quality The category addresses management of air quality impacts resulting from stationary (e.g., factories, power plants) and mobile sources (e.g., trucks, delivery vehicles, planes) as well as industrial emissions. Relevant airborne pollutants include, but are not limited to, oxides of nitrogen (NOx), oxides of sulfur (SOx), volatile organic compounds (VOCs), heavy metals, particulate matter, and chlorofluorocarbons. The category does not include GHG emissions, which are addressed in a separate category.
      • Air Quality Iron and steel production typically generates criteria air pollutants, volatile organic compounds (VOCs) and hazardous air pollutants, which can have significant localised public health impacts. Of particular concern are sulphur oxides, nitrogen dioxide, lead, carbon monoxide and manganese, as well as particles such as soot and dust, released during production. Technological innovation and continuous improvements in steel-making processes have reduced air pollutants significantly from the Iron & Steel Producers industry. However, air pollutants remain a concern because of increased regulatory and public concern about air pollution, as well as expansion of steel production in emerging markets. In emerging markets, regulatory efforts to curb air pollution may constrain iron and steel production. Active management of facility emissions through industry best practices implementation across global operations can facilitate the transition to sustainable steel production, reducing costs and potentially enhancing operational efficiency.
    • Energy Management The category addresses environmental impacts associated with energy consumption. It addresses the company’s management of energy in manufacturing and/or for provision of products and services derived from utility providers (grid energy) not owned or controlled by the company. More specifically, it includes management of energy efficiency and intensity, energy mix, as well as grid reliance. Upstream (e.g., suppliers) and downstream (e.g., product use) energy use is not included in the scope.
      • Energy Management The production of steel requires significant energy, sourced primarily from the direct fossil fuel combustion as well as energy purchased from the grid. Energy-intense production has implications for climate change, and electricity purchases from the grid can result in indirect Scope 2 emissions. The choice between various production processes—electric arc furnaces and integrated basic oxygen furnaces—can influence whether an entity uses fossil fuels or purchases electricity. This decision, together with the choice between using coal versus natural gas or on-site versus grid-sourced electricity, may influence both the costs and reliability of energy supply. Affordable, easily accessible and reliable energy is an important industry competitive factor. Energy costs account for a substantial portion of iron and steel manufacturing costs. How an iron and steel entity manages its energy efficiency, its reliance on various types of energy and associated sustainability risks, and its ability to access alternative sources of energy can influence its profitability.
    • Water & Wastewater Management The category addresses a company’s water use, water consumption, wastewater generation, and other impacts of operations on water resources, which may be influenced by regional differences in the availability and quality of and competition for water resources. More specifically, it addresses management strategies including, but not limited to, water efficiency, intensity, and recycling. Lastly, the category also addresses management of wastewater treatment and discharge, including groundwater and aquifer pollution.
      • Water Management Steel production requires substantial volumes of water. Entities face increasing operational, regulatory and reputational risks associated with water scarcity, costs of water acquisition, regulations on effluents or amount of water used, and competition with local communities and other industries for limited water resources. These risks are particularly likely to affect regions where water is scarce, resulting in water availability constraints and price volatility. Entities unable to secure a stable water supply could face production disruptions, while rising water prices could directly increase production costs. Consequently, entities adopting technologies and processes to decrease reduce water consumption may reduce operating risks and costs by mitigating the operational impacts of regulatory changes, water supply shortages and community-related disruptions.
    • Waste & Hazardous Materials Management The category addresses environmental issues associated with hazardous and non-hazardous waste generated by companies. It addresses a company’s management of solid wastes in manufacturing, agriculture, and other industrial processes. It covers treatment, handling, storage, disposal, and regulatory compliance. The category does not cover emissions to air or wastewater nor does it cover waste from end-of-life of products, which are addressed in separate categories.
      • Waste Management Although waste reclamation rates in steel production are high, the industry generates significant quantities of hazardous wastes. Slag, dusts and sludges constitute the three main industry waste types. These by-products often are recycled internally or sold to other industries. However, process wastes such as electric arc furnace dust, which may be regulated as a hazardous material because of its heavy metal content, can have significant environmental and human health impacts, present a regulatory risk, and result in additional operating costs for entities. Risks related to the long-term impacts of waste disposal may result in significant costs, including those associated with monitoring and managing contaminated off-site disposal properties, for which jurisdictional authorities may hold iron and steel producers responsible for remediation and restoration activities. Entities that reduce waste streams, hazardous waste streams in particular, and recycle or sell non-hazardous by-products, could mitigate regulatory risks and reduce costs while increasing revenues.
    • Employee Health & Safety The category addresses a company’s ability to create and maintain a safe and healthy workplace environment that is free of injuries, fatalities, and illness (both chronic and acute). It is traditionally accomplished through implementing safety management plans, developing training requirements for employees and contractors, and conducting regular audits of their own practices as well as those of their subcontractors. The category further captures how companies ensure physical and mental health of workforce through technology, training, corporate culture, regulatory compliance, monitoring and testing, and personal protective equipment.
      • Workforce Health & Safety Iron and steel production processes can present significant risks to employees and contractors working in iron and steel plants. Given the high temperatures and heavy machinery involved, worker injuries and fatalities are a matter of serious concern to iron and steel producers. Given the hazardous work environment, the industry has relatively high fatality rates requiring a strong safety culture and comprehensive health and safety policies. Although accident rates in the industry are in decline, worker injuries and fatalities can result in regulatory penalties, negative publicity, low worker morale and productivity, and increased healthcare and compensation costs.
    • Employee Engagement, Diversity & Inclusion The category addresses a company’s ability to ensure that its culture and hiring and promotion practices embrace the building of a diverse and inclusive workforce that reflects the makeup of local talent pools and its customer base. It addresses the issues of discriminatory practices on the bases of race, gender, ethnicity, religion, sexual orientation, and other factors.
      None
    • Product Design & Lifecycle Management The category addresses incorporation of environmental, social, and governance (ESG) considerations in characteristics of products and services provided or sold by the company. It includes, but is not limited to, managing the lifecycle impacts of products and services, such as those related to packaging, distribution, use-phase resource intensity, and other environmental and social externalities that may occur during their use-phase or at the end of life. The category captures a company’s ability to address customer and societal demand for more sustainable products and services as well as to meet evolving environmental and social regulation. It does not address direct environmental or social impacts of the company’s operations nor does it address health and safety risks to consumers from product use, which are covered in other categories.
      None
    • Supply Chain Management The category addresses management of environmental, social, and governance (ESG) risks within a company’s supply chain. It addresses issues associated with environmental and social externalities created by suppliers through their operational activities. Such issues include, but are not limited to, environmental responsibility, human rights, labour practices, and ethics and corruption. Management may involve screening, selection, monitoring, and engagement with suppliers on their environmental and social impacts. The category does not address the impacts of external factors – such as climate change and other environmental and social factors – on suppliers’ operations and/or on the availability and pricing of key resources, which is covered in a separate category.
      • Supply Chain Management Iron ore and coal are critical raw material inputs to the steel production process. Iron ore mining and coal production are resource-intensive processes. Mineral extraction often has substantial environmental and social impacts adversely affecting local communities, workers and ecosystems. Community protests, legal or regulatory action, or increased regulatory compliance costs or penalties can disrupt mining operations. Iron and steel entities could face supply disruptions as a result, or in some cases, also may be subject to regulatory penalties associated with the environmental or social impact of the mining entity supplier. Minimising such risks through appropriate supplier screening, monitoring and engagement, iron and steel producers may manage their direct critical raw materials suppliers proactively to ensure they are not engaged in illegal or otherwise environmentally or socially damaging practices.
    • Business Ethics The category addresses the company’s approach to managing risks and opportunities surrounding ethical conduct of business, including fraud, corruption, bribery and facilitation payments, fiduciary responsibilities, and other behaviour that may have an ethical component. This includes sensitivity to business norms and standards as they shift over time, jurisdiction, and culture. It addresses the company’s ability to provide services that satisfy the highest professional and ethical standards of the industry, which means to avoid conflicts of interest, misrepresentation, bias, and negligence through training employees adequately and implementing policies and procedures to ensure employees provide services free from bias and error.
      None
    • Systemic Risk Management The category addresses the company’s contributions to or management of systemic risks resulting from large-scale weakening or collapse of systems upon which the economy and society depend. This includes financial systems, natural resource systems, and technological systems. It addresses the mechanisms a company has in place to reduce its contributions to systemic risks and to improve safeguards that may mitigate the impacts of systemic failure. For financial institutions, the category also captures the company’s ability to absorb shocks arising from financial and economic stress and meet stricter regulatory requirements related to the complexity and interconnectedness of companies in the industry.
      None

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